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Us 15, U.s. 12, United States 8, Cliff Guffey 8, Michigan 6, Mexico 5, Darrell Issa 4, Mr. Mulva 3, Afghanistan 3, Washington 3, Jim 2, Barnett 2, Conoco Phillips 2, Jim Mulva 2, Juan Miranda 2, John Mccain 2, Texas 2, Pennsylvania 2, America 2, North America 2,
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  CSPAN    Today in Washington    News/Business. News.  

    September 30, 2011
    2:00 - 5:59am EDT  

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of course my good friend juan miranda. this is obviously at the beginning of a very serious discussion. the questions that we have to face and face the horror, is this all coming to a quick visit to little? can it get the job? is this a realizable goal? or is it a naïve dream? these have to be face. how do you engage the private sector. juan miranda is done by bureaucratic organizations. finally, above all, how will the government of afghanistan and businesses in afghanistan leadership in afghanistan
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continue their engagement were they've after all been the pioneers of this and the years to come us in the changing environment in which the country assumption. so obvious and many many other -- much more plentiful questions i'll have to be addressed, we hope, to be one of the settings in which that might occur. thank you very much fory.
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-- it is washington, your way. host: we're back with cliff guffey, the president of the
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american postal workers union, here to talk about the future of the post office. let's begin with how many union workers to represent. guest: we represent approximately two and a 20,000. -- 220,000. we represent the clerks that word for windows, that sort the mail, the drivers, the mechanics, and the maintenance employees. host: there is a lot of debate about the future of the postal service. congressman darrell issa has legislation to reform it. senator john mccain has introduced a companion legislation similar to that legislation. are you willing to make concessions, and what are they? guest: we just went to negotiations and made a lot of compromises. representative lynch has a bill
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in congress which has 220 code- sponsors, -- co-sponsors, which will reform the post office. on the other side, senator carpenter has introduced legislation that would support the postal service. john mccain's rubberstamp of darrell issa's bill will help destroy the post office and layoff toyota thousand people. host: what are the concessions so far? guest: week relaxed rules on flexibility so the postal service -- the post office could be open longer. there would be no legacy costs. we recognize it is in flux, in transition to a whole new world. we started out with lower level tried our best to
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meet their needs. over the last three years, 100,000 jobs have been removed from our workforce. we have done it without laying off people. we thought that was important to go forward with that. there are many people eligible to retire, and they do not need to be laid off. in darrell issa's bill, he says if you have reached the age of 55, if you are ready to retire or not, you must retire. that is age discrimination, and those things are not acceptable. host: what about how the pension system works? guest: there are three areas of concern here about pensions. the postal service pension plan, which is paid through by postage revenue has placed 285 billion
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dollars into the pension plans. the first has $90 billion in debt. there is no question that there is $6.9 billion to much. postage has input into this fund. that is plenty of money to take care of the pension. in the service retirement plan, there is $195 billion there in which all of these actuaries from the office of the inspector general had said there is between $50,000,000,000.69 $5 billion too much in that fund. we're not saying to give that back, but to shifted to other things in the deficit. what the postal service is doing right now, it is like someone buys a car, and had 36 months to
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buy the car, and you pay it out in defense, the government says you have paid in advance, but keep making your patience. that is a tragedy. into thousands the key to making your payments. that is a tragedy. in 2006, there arose a requirement to refund health insurance payment premiums in 10 years. in the same law, they said you cannot pass that on to the rate payers. if you have a non-profit organization and to not have money to sit on, and the price of gas and everything goes up, and you can only raise your price of stamps, what is going to happen with that? they will go down by $5.5 billion a year. host: why do we need a non- profit organization to deliver
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mail in this country where we have fedex and other private carriers that do the job for profit? guest: they did not go to every door in the united states. we go to 100% six days a week. we deliver 25% of their mail. in other words, they do not take the trucks to the rural areas. they can take the mail over the counter because the cutbacks does not allow us to leave post- gulf with -- post offices open past 5:00. host:, darrell issa was on the show. he had comments about the postal union. guest: who would not be willing to be in a pension plan that essentially we pay later if we stay in business? more importantly, he is right. this is the only agency to do
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this, because this is an agency that is allowed to get its own revenue, said its own benefits, which are higher than the rest of the federal workforce cut and an agency that was at independence, we want them to have it. it is a business unit and that is simply not making a profit, and it is primarily because they have not made the changes they need in how they do business, and how many people work there. it is not they cannot make a profit. it is not that they are paid too much. there are too many workers, and they know it. host: cliff guffey, to many postal workers? guest: i think anybody that goes to a window and stands in line knows there are not too many. there has so much drain on postal revenues to subsidize other parts of the federal government. when you have hundreds of billions of dollars in pension retirement accounts that were not there for postal employees, they will not get it back
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because it would show how under- funded the rest of the federal government is. what they said is not true. we get the same dollar-for- dollar benefit. it is paid for only buy postage revenue. we get the same health insurance plans. the cost is the same. the post office might pay a little more for hours then what the other federal government does, but that is through negotiations. it is the same benefit. host: we're talking to the president of the postal workers union, cliff guffey, and the future of the postal service is our topic. we have a fourth line set aside for current and retired postal workers, and you call in. we will also incorporate some students. our campaign 2012 bas it is
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visiting a high school in indiana, until the next 45 minutes we will hear from 15 students participating in the program. the high school is located in northwest indiana, and over 1000 students attend. thank you for preparing the students for the call in, and comcast cable for sponsoring the visit. our first student is jesse. >> how would you suggest to financially restore the united states postal service besides cutting back employment and benefits? guest: we think it is simple. there will be a slow, gradual change in the post office that needs to be done. we recognize there are people that will not use the post office and probably never use it again, but there is $65 billion of revenue by people that are
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utilizing the postal service. they should be done gradually. they should be done humanely, was consideration of the poor communities and rural areas, so they did not lose their service. that could be done by using these over-funding, the money ained.as been dreame that is the humane way of doing this. you have to remember, if you read a post office with two hundred or 300 employees, it does not just that those employees. it affects their families, the businesses around the post office. the post office is the core of a $1 trillion economy, and 0.8 million other people, and as these offices close, a lot of people will be effected.
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host: it is from james, a postal worker in lafayette, indiana. caller: the $5.5 billion, is that for the civil service employees only, or for all the civil service people that are retired to route the government? guest: the $5.5 billion, which is the of the deposit -- which is the yearly deposit into their retirement, that is for everyone. they are funding it all for 75 years. we would like to see a recalculation. if we're going to be the only agency to refund all of that, we would like to see that amateur rise over 30 years. the problem that we have right now is a set the bill based on 700,000 employees. we're down to 500,000 now, and as they lay off another 120,000, and the people that
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they layoff will not retire, and not the benefits, who gets that money? it just becomes revenue the federal government has to spend another bridges to know where. host: let's go back to our campaign 2012 bus. taylor is next. go ahead. >> good morning. what are the possible causes of the financial losses to the postal service? guest: there are a lot of things playing into it. the internet plays into it some. people did not communicate in hard copy. when i was in vietnam, i love getting letters from home. today, people in the war zone can open up their laptop and talk to their families through the internet. communication style is changing, but still, there is a
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lot of this nation that relies on getting their drugs, their medicine through the mail, checks and various other things. advertising to the community is still a hard copy item. most believe the best way to advertise is putting something in the hands of the consumer. host: i want to show you what the postmaster general have to say when he was on this program about the negotiations with unions and how that came about. guest: we have talked to unions. there are opportunities with overtime reduction and other things. you could create opportunities to boost people off of the roles and irresponsible way. >> will this have an impact on
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the union negotiations? guest: there is always discussions. we have to go unions in negotiations and won in arbitration. any time, especially with the economic situations we are facing, that has to be taken into consideration when we sit down with unions. host: cliff guffey, what is your reaction? guest: it is trooper we work very closely. we entered negotiations -- it is true. we work very closely. he has three unions he is negotiating with. dohink they will work iand their part in saving the postal service. it is in no one's interest to destroy the companies that is feeding their families. we try our best to work for the postal service, and i'm sure the other unions will, too. there are things that should not be focused on the postal service, when we can resolve our
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problems ourselves. host: a postal worker himself, in indiana. caller: i want to make a quick comment darrell issa is not our friend. love him, but he is not our friend. mr. cliff guffey, make sure you tell everybody out there that the post office is the way to go. we beat the price at ups, and sex. and, when it is snowing outside, the post office is the only one moving around. host: have you been participating in the protest around the country? caller: yes, ma'am. i have. i love it. remember, this is not a bailout. this is our money, and we want congress to take that money and give us access to it so we can
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help the post office. it is not a bailout. we did not ask for tax money from the american people. it is our money. host: cliff guffey? guest: i appreciate you calling in. u.s. the but the demonstrations, we have -- you asked about the demonstrations. we just had demonstrations across this country. we feel like the average is around 50,000 people. that is postal workers testing congressman for help. -- asking congressman for help. i would not say any congressman is not our friend. some support us more than others. i do not like to get into partisanship. i hope the government and the congress can set aside differences and solve the problem, not with a bill, but the name means that would allow the postal service to -- not
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with a belt, but it means that would allow the postal service to survive. host: matt has this tweet. can i guess, and why he thinks this pre funding and it applied to the u.s. postal service, does this apply to other agencies? guest: i can only speculate because i was not in the room with the gentleman, but anytime you say you cannot raise the rates to pay for something and put an additional $5.5 billion on their, you are setting up somebody to fail. what this did, for less six years, it cause the post office to go down by least $5.5 billion. without that, they would have been in the black. we have been struggling to we've had a lot of problems, but we would be meeting those problems. host: how would you need pension responsibilities? guest: well, the pensions are there. they're being paid for separately.
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this is an additional $5.5 billion for future retiree health costs. host: how would you meet that? guest: how does any other country -- company in the world make it? host: sometimes they did not. guest: for health care, and they do not. host: some look at the auto makers and say that is part of the reason. guest: all of that has been paid back. host: right, but it was because of health care. guest: we already have a future retiree health care insurance fund -- almost $40 billion. about 40 or 60% of that, any private company who does that is usually only financed by about 30%. so, we are overfunded there
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also. we are not saying do not contribute to it, but stretching out over 30, 35 years. they talk about is the post office sales. the post office owns $50 billion worth of property in this country that could be sold to pay off things in the future. host: you would agree with that? guest: at some point, they should sell off. taxpayers should not pick it up. host: good morning, ron. caller: what steps are they taking to revitalize the postal service on a local level? guest: we have tried our best to provide lower-cost employees, provide flexibility, maintain
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offices, and keep offices open longer. we are given post offices the right to have flexible schedules. if somebody is working eight- five, they could be scheduled eight-seven, and work less days a week, so they can keep the post office open without having to pay overtime. we have done everything to help generate more revenue. there are a lot of situations out there were a lot of union rules forced the post office to contract out work. i will give you an example. driving a truck from oklahoma city, to dallas, and back, would require at least 10 hours. if the work day is eight hours, if we could not do it, the contractor could charge whatever they wanted to. we say we will waive those rules, provide lower-cost.
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the post office could then save money by doing it internally. instead of contracting it out, they could do it now internally without having the additional costs. host: are those ways to not only save money, but increase revenue? guest: sure. my office in washington, d.c., is one block away, in one of the hearts of the downtown area were a lot of lawyers takes things. we close at 5:00. and ups are open to it. this talk about putting them beyond a -- putting them into a grocery store. that is the way to build your business, drive people to other customers. host: there are ideas to allow
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advertising on the side of postal trucks. do you think that is a good idea? guest: it depends on the type of advertising. if it is family-friendly -- i do not want to see budweiser on the side of the truck. the post office in small communities is where the flag flies. there should be other government services put into the postal service. i am a disabled veteran. i could get a lot of my benefits -- checked my benefits online. to further access greater depth, i must go to a va facility, which could be 150 miles from home, and i had to go three times. if you could do that a post office, why not? verification that you are who you say you are. host: consolidate services? guest: consulted government services.
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host: in rural areas? guest: in all areas. there is no reason it could not work in large cities. we have a position that could benefit the country more if we were allowed to do services that our hands are tied, preventing us from doing right now. host: california, you're on the air with cliff guffey. caller: this is unbelievable. in 2006, george bush and his cronies decide to destroy the one industry that has been sustainable on its own without taxpayer money, and all of the sudden, you are seeing that the post office has to many employees. are you serious? the republican government is
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crippling this country, and taking everything from the american people. they are stealing your benefits. they are stealing billions of dollars. that helps them with their war chest. i cannot believe it. i thought it was all about e- mail and facebook and twitter, the reason the post office was going bad, but it is because of george bush? host: cliff guffey? guest: it is a shame, but there are people in government that do not want government to work. they want government to fail, and the postal service has been an entity since 1970. for 36 years, the employees salaries went up at the rate of inflation, and a product that we postage was about 10 cents and newspapers were about 10 cents. newspapers about 25 and posted
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about 25 today it's about 44 cents. newspapers are a dollar or $1.50. newspapers are a great buy. we stayed well below inflation. fix006 someone said let's that. they fixed it by putting in provisions that would destroy it and make the postal service look bad. that's what happened. >> one of our 15 students aboard are 2012 bus in indiana at the high school. go ahead, steve. caller: good morning. do you feel the u.s. postal service needs to be more concerned about saving jobs or saving money at this point? guest: i dig they can do both. there are ways to streamline the system without causing the system to collapse. if you move too fast in a changing world, you can eviscerate the need for your
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service. when you start closing plants and delaying the male, then that causes people to look for other ways to get their product delivered or what have you. to stay competitive, they cannot close down their network. in other words, you don't take care of a medical problem on your ear by cutting off your leg. you cannot do as large a surgery on this type of institution as fast as some people wanted to happen without destroying the service. that is widespre what a lot of s debate is about, how to gradually take this down to meet the needs of society as they decreased. do you do it quickly right now or do you do it over a longer term? by doing it over longer-term would not cost the taxpayers any
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more. it would do nothing except the postage money that has come in through posted sales that were put into the postal service to provide this service to be used for that service and not to be used for other government services. host: we have a postal worker in houston texas, you are on the air. caller: hello. what's been going on for a long time is detractors of the postal service have been trying to do sabotages it. every industrial nation where they privatized postal service, the rates have gone up and the service has gone down and no one is happy with their postal department anymore. this misinformation that they are calling ethis a bailout, this is a scary propaganda when they are not telling the troops and trying to predict not .elling the truth an
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guest: i would love to compare our postal service to the german postal. equivalent. germany has contracted out all their stations and branches recently, all the retail product. they have a system in germany where they have a great rail network, a whole country is crisscrossed by rails. they don't have to put mail on airplanes like we do in this country. it travels in a steeper manner across the country. they have socialized medicine in their country, so their s goals of this is not have to make big deposits. but their postage is 22 cents more than ours. you are correct. when you talk about the taxpayer bailout in this country, if they get to the point where a lot of this is likely going, where they would like to contract out huge portions of their country, people will think that is
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profitable, we will do that, someone will make a lot of money. but then who would deliver the mail to the small rural areas and poor communities? that would be done by government again and funded by taxpayers. while the post office cannot make a profit overall, they used high-volume revenue areas to pay for a new low volume areas. prepare try to do is do away with low volume areas which would hurt people in rural communities, or they want to contract out to work in large areas, which will hurt their rural communities. it is a node installation if you go down the road of some of these congressional bills just to destroy the post office. it is an american service for the american people and has to be universal service or its not a service at all. host: guy allen is calling from aborted campaign 2012 bus. go ahead with your question. caller: 1 and do you think it's the biggest misconception that americans have about the postal service?
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guest: clearly the biggest misconception we have in this country is that it paid for by tax dollars. it is solely run by the posted revenue that comes in, 44 cents at a time or the individual advertising mail. we started running a commercial several months ago that it's not funded by tax dollars. host:, is banned on the commercial advertising? guest: over $1 million. it was an awakening to the american public and changed the dialogue in a lot of the news media that were saying it was paid for by tax dollars. it also woke up a lot of our people. our people are dumped at all the time through the window with people saying that we pay your tax dollars, when they really don't. they don't take tax dollars. we everything for the postal service. we pay for the trucks and the
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gas and future pensions and retirement plans and health care. we pay for that out of postage. i think that is the biggest misconception out there right now. much of the american public thinks taxpayer dollars pay for the post office. host: here's an e-mail from franklin, conn. also service needs innovation, no saturday delivery. what you think about those ?ursar-- those what about eliminating saturday service? guest: we could save everything and not deliver at all. if you are a service, you are a service. it's not going to save that much money when you have overpaid pension funds by
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$70,000,000,000.-1589965110 and overpaid into the future retiree health insurance. when you overpay into all those, to say we are going to cut service to the american people to save $2 billion? if they close 3700 post offices, they will save less than a couple hundred million dollars. but they are having to cut and look at the bottom line of everything because they're being required to put this money off to the side. it's not necessary. when you are fully funded -- and they keep saying put more in there and more, there's nobody in america, that would do that with their bank or anything else. they prepay their loans and the bank said we are going to foreclose on you, it would be observed. the same people in this country if these and kind of regulations were put on any private company, they would say you cannot put these regulations on, they are the same ones and
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we must put these regulations on the post office. host: michael is a republican in michigan. caller: good morning. i am also a disabled veteran. that makes us brothers. guest: very good brothers. caller: we used to get our medication delivered by ups or fedex, as you know. we now get it through the post office. although it is probably a lot cheaper, you guys are not getting it done. i get medication -- they dish it out to 30 days at a time. you do not get it until the 30 a day or possibly the 31st day. when it does not show, is a problem. call the post office, they don't answer the phone. and when you to answer the
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phone, to get an attitude. guest: i sincerely apologize. i get my medication, of them per month, 90 day-spurts. the minute i get them this month i call nine days in advance. i have never missed one. we do recognize that there is a staffing problem on the lines, but you cannot drain the money off that goes for service and then say why is service not there? i think the postmaster general is trying his best right now to try to improve the communications and we want to work with him on making sure that the postal workers have good answers. we have people there to solve the problems. it's just not there right now because we cannot drain this kind of money out of a system and not cut service. you are talking about exactly what we want to correct.
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you have to have people there to answer the problems for people. you cannot do that with putting the cash flow somewhere else. host: daniel has sent this e- mail. guest: the issue has been addressing lately over the last number years, there's been a great reduction in the number of overhead costs. thee looking at one of things in the negotiations was we will give you lower costs employees and more flexibility, but in exchange you cannot be taking any work away from us and paying someone at another level could do. we want all that work back. responsibly bring order back and have been paid for by a working person who gets paid much less
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money. >> level 18, level 6, with the average salary? guest: level 6, around somewhere in the mid 40's. low 60's is probably 60 or 70. host: that as a supervisor? guest: correct. they say we are overpaid, but anything they can strip away from us by timekeeping and various activities, personnel work, they say we are overpaid, take it away from us. host: i want to get to another student, cody jones. caller: hello. are there any services that the post office could cut that are not useful to americans anymore that would help the post office reduce layoffs? guest: i don't know that there are any services that we are not
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using. there are some services they may have to bring back. things like -- if they go to your days of deliver door-to- door, it would have to bring back maybe special delivery, so people could get their medicines and parcels could be delivered on the sixth day. we are not advocating a reduction in any of the services. but i don't know of any services right now that are provided that should be coupled -- cut. there are some services we need an back so we can help the customers. bafta provide the service. host: frank is a postal worker in oklahoma city. caller: i would just like to say congratulations to mr. frank duffy. became a long way from oklahoma city. i think he's done an outstanding job and we need to let the public know that not all issues
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at the postal service are negotiable. thank you, sir, have a blessed day. guest: banks alike, frank. -- thanks a lot. i came up through the system? 40 years. host: joanne is a democrat in chicago. caller: i am a retired postal worker and my question is, why is our health care insurance -- it has been so high, we pay all of our premiums and it has been going up like $200 every year and the choice of insurance that they give us is high. i wonder is that because of what happened in 2006 or is that just the way it is that retirees have
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to give up all of their pensions to get health care insurance? guest: i agree. that's a tragedy the way the health care in this country, the costs have gone up 14% or 60% per year, which is reflected in the pavement for retirees and current employees -- payment. the products coming out of their tech is going up faster than their attacks are coming up -- .han their checks are they have to pay a large stock of their salary for health care. if we are working on that in different ways. the postal service has creative suggestions to maybe take us out of the federal employees health benefits plan. there are issues on medicare, getting more people -- getting more people into medicare and may be paying medicare supplemental insurance rather
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than all the fees. we want to do what is best for the workers, retired or currently working. we will be looking at working as best we can in all these areas, because there's one group of people making a lot of money and often that's the insurance companies. host: the postmaster general spoke about the pre funding retirement. >> i agree with the fact we have to move away from the retirement or pre-funding of retirement. second issue is looking forward. changing the requirement to pre- fund $5.5 billion would of been a great solution four years ago. revenues continue to go down. even if we would reduce the pre- funding and just do that, next august we're out of cash. you have to take many more steps to change what we are
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doing. that is why we are pushing for this option and pushing congress to refund overpayments we have made. retirement systems, to give us the operating cash we need to handle some of these business changes going forward. host: let's hear from our students aboard the campaign 2012 bus. zach. caller: what is your opinion of removal of saturday mail? guest: i have stated repeatedly that i don't like to see any services, to the american people. they have paid for the services and the money is there, but it's being utilized for other government reasons. they are taking the money that was paid for by the rate payers and utilizing it to subsidize funds that should be paid by the taxpayers. the retirement system's for the department of agriculture workers or the treasury department and all these other
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different agencies, they get appropriated tax dollars and spend the tax dollars and they're supposed to be putting money into retirement funds, but they're not doing that. overages are our zero bridge showing. they are terribly overfunded. any employer must pay workers' comp insurance. the post office was in dire straits this year. it threatens not to make their workers' compensation deposits into the federal government. -- they threatened. what would that affect have on all federal employees? they wrote me back a letter from the government saying no one would get paid. that shows me how much they rely on the postal service money.
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why would the people from the usda and other agencies put their money in there to pay their own people? they need the post office money and service charges from the post office to make sure everyone gets paid. that's not right. that is taking money patrons have paid for oil service and then utilizing it for other government services, which should be paid for by taxpayers. host: high school student test and is our last phone call. caller: hello. what can economists do not do to restore profitability to our postal system? guest: i think this is a misnomer. the post office would be profitable to if they were not overcharged for all these other congressional funds. if they would set that right. all congress has to do and is looked at the lynch bill and a few of these others and recognized the postal patrons
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have overpaid into the postal service which has required the postal service to pay into the congress. if they were to relax those and allow the post office to utilize that money for postage usage, for services for the postal community, the, to do anything else. the post office and employees in the postal service have a great tradition of providing service and cooperating with each other to take care of the problems of global service. we can do that without the congress putting more obstacles in our path. they need to remove the obstacles and the postal service will serve the community as best as possible. host: what happens next in the debate? guest: i think the next battle turns to capitol hill, the struggles. it is a continuing struggle in congress at this time. i don't want to characterize it as a partisan debate. that creates a lot of problems
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in many areas of government. , want this to be a debate about the service to the american people. we think this is a service that the government provide the best and has done well for 200 years or so and we are respected by the american public and we want to continue that. if we don't want to be characterized as a partisan or this or that. we will do our best to educate our people about which congressman support us and which don't. we have bipartisan support from congressman weiner's bill and we are proud of that. host: cliff guffey of the american postal workers union. thank you. we also want to spanx the high school students aboard our campaign 2012 bus in indiana and we want to sta
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>> at the next comment james mulva, chairman and ceo of conoco phillips at the detroit economic club. he spoke for about 50 minutes after a short introduction. >> one of the fortune five companies can the nation's third-largest energy company. conoco phillips is engaged across the value chain from exploration to production to natural gas processing, refining, marketing and kennels. headquartered in houston, the company operates more than 30 countries worldwide and has over 30,000 employees. mr. mulva has not only worked there for 30 years, he was instrumental in building conocophillips to its current major status. he joined predecessor phillips petroleum freshened of the u.s. navy in 1973 after bachelors masters degree in administration and finance from the university of texas. he advanced the financial ranks, became chairman and ceo in 1989
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in response to recent competition industry and the need to gain economies of scale as well as the opportunity access to me that the rapid expansion of the company. he initiated acquisitions in refining alaskan oil international growth and a broader presence in north america natural gas and the entry into the global liquefied natural gas business. nontenure basis, conocophillips is but a scripted total shareholder returns. not an easy thing to do, i know. mr. mulva is known for support of federal macnair conference of energy and climate policies and for his advocacy of natural gas as a dual solution. incidentally, he's from green bay. i think that if he was for some of our competition there. he serves as a director for general lack direct added member of the business council or the m.d. andersen cancer center in houston. ladies and gentlemen, please welcome jim mulva.
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[applause] >> steve, thank you very much for that kind introduction. i'm very pleased to be invited here to the economic club. yes, i did grow up in the great lakes area and i can assure you this is a special part of the country for me. i actually can recall the big four carriers on lake michigan. nice to see them from time to time. they pulled iron from the north throughout the entire region. one that manufactured oils such as building cars, tractors, trucks and machinery, so did the ship errs, miners and support industries. as a result of the great lakes area, it it flourishes really was a good lesson in how we've come to learn to need each other. that is industry from the states and throughout interdependent.
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clearly, job retention and job creation are foremost in everyone's minds today. of our president, to the state capital, jobs are the most pressing need. i give you my view on this issue, speaking as the ceo for the company and i do serve on a number of our corporate boards. one of the ways we enhance the value of said 10 to our shareholders is too careful allocation of capital. so we must provide capital businesses that can escrow. the growth is either limited or declining. we have to make discipline investments. and generally, only the very best projects go forward. they're also investor return expectations that we have two me to share performance, dividends and purchases. we must continually adapt to
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changing market conditions. in our case, we plan to split our company into its two logical elements. that is x duration and production, define and develop energy and, refining and marketing to transform energy into the can timber products that we need. our success at implementing the strategic element is a key to keeping the enterprise healthy. so if we do this correctly, but will also retain and create the maximum number of jobs that our business can support. in turn, we need are many other society obligations to help enhance the health of the american economy. so like energy, the either industry has the same capital allocation need and challenges as well as changing markets. it has adapted in the past. it will do so again.
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as always, the adult industry remains foundational to our economy, both here as well as nationwide. the auto industry account for 20% of all u.s. manufacturing, jobs directly or indirectly. the manufacturing is absolutely essential. so this then brings me to the topic i want to focus on india too is very essential. it is the area where we have chosen to devote a substantial share of our company's capital and that is natural gas. we have done this because it is important to our business. also because it contributes to a nation energy security into american job creation. natural gas, as you know, he's our homes, schools, factories and helps generate electricity and she has another vital characteristic with any attack shares. it creates jobs.
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president obama visited detroit on labor day to talk about jobs. unfortunately, he did not mention natural gas either then or drawing his speech this past week. but i can assure you that gas is already helping spark the american job creation machine. and we intend to grow that into a plan. i conocophillips, we believe so strongly natural gas that it's a major portion of our company's portfolio. we believe that natural gas must be part of any discussion strengthening our company's long-term economic health. they should also be part of any discussion on improving energy security, protecting the environment and gas, creating jobs. like a president, i'm very enthusiastic enough to turn around the prognosis for the u.s. senate industry. you have added 115,000 new jobs
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since 2009 than those in 13 years. sales are up, quality is rising and are our exciting new domestic cars. my wife and i just bought one and we love it. the automotive future is all so exciting. fuel economy is rising. plug-in hybrid cars are building a following. via publicity to recharge these cars must come from somewhere in here again, natural gas can help. there's also congress for natural gas powered vehicles. at least where they are practical. inflate trucks and buses that can be refueled and central facilities at night. so it's fair to say he can come a detroit and the energy industry are in lockstep. a strong american job creation machine and natural gas is an important part of that future.
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we have ample reserves here. we can access them in a safe and environmentally sound way. these resources are generating new jobs by the tens of thousands. this isn't just our story. it's yours too. for every job created by natural gas as to the customer base for cars, houses, appliances and essentially about everything else. the availability of natural gas of low cost represents a key, u.s. competitive advantage. very few countries can match our expanded energy resource base. we can use it to strengthen competitiveness of energy of american manufacturers. i'm both a direct and indirect basis, natural gas currently sustains 2.8 million u.s. jobs. and then there is more. the consulting firm recently looked at the oil and gas industry's future job potential.
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now with predicted, half a million new jobs would be added by 2030 under existing government policies. but if government adopted more favorable policy, we could create another million new jobs on top of that. and that would be at no cost to the government. in fact, government revenue would rise by about a hundred billion dollars, which would certainly help deficit reduction. now companies are really big numbers. say you might ask, are they really achievable? to answer what we've heard it done, and a relatively few years, the north american natural gas output has been completely transformed. we now recognize over 100 years of survive. that's enough for children, grandchildren and beyond. the novices creating jobs and not just in the traditional producing states.
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shale gas now comes from at least 15 states, including kentucky, new york, ohio, pennsylvania, west virginia, indiana, illinois and yes, even michigan. this has been made possible by no less than a modern industrial revolution. it has been known for decades that shale rock and many in the united ditzel's natural gas and sometimes form. weisbrod deposits of this rocking cover thousands of square miles, even entire states or multiple states. but until recently we didn't have technology to produce economically. then, in the 1990s, we started complaining to different innovations. one was hydraulic fracturing. this is the pumping of fluid down under pressure to create micro-fissures in the rock commit tpd for surface of the
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earth. these features are very tiny and we prop them open by and check sand with water. and then, that provides pathways for the gas to flow and ultimately produce. now, fracturing isn't something new. it was developed in the 1940s and has been used safely on a million wells over several decades. but in the case of shale rock, this still wasn't enough. another innovation require, this time a new one called horizontal drilling. unless they start with a vertical well control down thousands of feet and at the bottom recurve the well out the other side. these horizontal wells can extend a mile or more in a targeted formation. dan, this exposes the well tomorrow i guess. rock. so these long, horizontal wells
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combined with fracturing a production possible for the first time from a number of these rap tapes. i may also help reduce a surface footprint since only one well can replace it would have been required for a number of wells. so combining these two technologies to create major shale production online has any real game changer for our industry. as recently as the 1980s, natural gas was considered a sign that industry in the united states. production, reserves and demand were declining. the turnaround fence has been so dramatic that we shale now refer to natural gas is nature's gift, partly because of its abundance and its low cost. also for his benefit the national energy security and the environment. in fact, natural gas is essential to helping both short-term and long-term environmental goals.
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it produces nitrogen, sulfur compounds that cause acid rain and smog. when used for power generation company produces only only half the carbon dioxide of coal. it requires one 20th the land footprint of equivalent wind energy. power plants fueled by natural gas use 60% less water than coal plants generate the same amount of electricity. and they do it without producing site or ash. also, the availability of natural gas facilitates the use of renewable energy. gas power plants have very flexible with respect to ramping up in ramping down. so they can easily ramp up when the wind doesn't blow for the sun doesn't shine. electric vehicles catch on in the future, we could recharge them with electric power
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generation and do it cleanly and efficiently. so let's bring this home to michigan. as you probably know, there is a shale gas here. it was produced from the formation as early as tonight team for these, but intensive development related to take place at the 1890s. nearly 10,000 wells are online today and after all these years, production is starting to fall. there are two new shale glucagon tram and they are called hollywood in the utica permissions. that is attracted $170 million in lease payments to michigan state government this past year. acceleration development is still in the early stages. natural gas currently provides 80% of michigan's home heating and also provides 10% of michigan's electricity so there's plenty of room for growth. gas is an important option for midwestern utility can be used.
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the epa is tightening standards on emissions of mercury and other substance is. this may cause a shutdown of some of the older coal-fired plant. some natural gas we believe is the best option to sell them. by the way, you probably use natural gas in more ways than you know. besides energy, it's about material and fertilizer, plastics and chemicals. this combination means that natural gas plays a role in the production of countless household products. now let's take a look closer at some of its job creation benefits. the barnett's shale trend is located in northeast texas and that has created 100,000 jobs. in south texas, a new field he go for it will create 60,000 jobs by 2020 and so thousands of jobs already exists. the surrounding area is booming for new trilling and increase
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business across the board from restaurants or grocery stores to hotels. a marsalis trend is located in the northeastern part of the united states and as the largest resources of them all. it covers all or part of seven states. according to penn state university, gas development now supports 140,000 jobs in pennsylvania alone. natural gas benefits other industries. for example, petrochemicals. the american chemistry council said it would be keen for greater domestic use of natural gas production. they see a 25% increase in supplies associated with gas production because this is used as feedstock for making chemicals. this would create 17,000 jobs in that industry at 395,000 more jobs outside it. the numbers like these are really very, very encouraging.
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so we had a powerful job creation machine available if you put it to its full use. but capturing the full potential of natural gas, our industry faces a number of challenges. some are not unlike those faced by detroit. we recognize we must always continue innovating. we must keep on innovating -- inventing new technologies to minimize our environmental footprint and enhance safety. we must overcome some mistake in public perceptions. for example, the silver bullet. this is the belief that there's a great new energy source just around the corner and that it will be cleaner, cheaper and easier to port than the use of fossil fuels, while also creating this wonderful new green jobs. well, i've got news for you. natural gas comes closer to being that silver bullet than anything else does.
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it's here today. it's increasingly abundant, cheap and clean. the infrastructure already exists. rather than merely promising jobs in the future, gas is creating the now. by the tens of thousands without special government subsidies. this is not to say that natural gas is the only energy source needed. we believe all sources will be necessary in the future. also feels, biofuels, wind, solar, even some sources not invented yet. this would be particularly true if the national economy rebounds. that natural gas is far more than a bridge to the future as a key part of the one term solution. since the shale gas is breathed new life into the natural gas industry, it's unfortunate to see a serious threat emerged to its further development. and that is the perception that hydraulic fracturing pollutes
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groundwater. the record is in our favor. those million wells safely fractured since the 1940s. now come and epa has studied the environmental record of fracturing the past. it concluded no additional federal regulation was required. a new study is underway and we expect the results sometimes next year. that is not to say that there is no reason for public concern. there have been some problems, but they are rare and they were caused not by fracturing, but by faulty drilling and well completion work for an proper handling of fluids on the surface. the fracturing is not inherently risky to groundwater. it occurs far below drinking water aquifers. typically thousands decorated by multiple heirs of solid rock. in the wells are carefully cemented in place to seal them
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off from groundwater. but to address the public concerns, our industry must follow good practices. these existed we must adopt a and make them standard procedure. there is a role for government oversight in this and also we must demystify fracturing. conocophillips supports disclosure of a nonproprietary substances contained in fracturing fluids. over 99%, say 99% of these foods by content or water and sand. the rest is so-called toxic chemicals are primarily traced out a taste. each serves a purpose. you can find some of them in everyday products that use. food preserver to cause mandates , detert chair, table saw come into others. so next, let me spend a moment or two when government policy.
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washington talks a lot about encouraging energy development and probably believes it does a great job. but the walk doesn't match the talk. for example, the energy industry faces threats of tax increases the target us alone. this despite the fact they're effective global tax rate far exceeds those of other industries. we face the imposition of new regulations that cause unintended impacts. regulations to protect the environment may not adequately be assessed for their impact on consumers and on business. the cost-benefit analysis used to justify enactment of regulations may use skewed numbers that support solution. regulations are required, they should be affect even reasonable and should not duplicate the thousands of federal and state requirements that are already in the books. we also face political risk resistant to opening new areas
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for exploration. this despite the fact the public favors expanded, domestic energy development. also many states have enacted renewable fuel standard that may require utilities to use certain muscles that renewable energy. these sources are more expensive than natural gas so they can try the consumer cost and the retired demand for natural gas itself is a clean energy source. so government should not and the retired demand for natural gas itself as a clean energy source. so government should not and the retired demand for natural gas itself as a clean energy source. so government should not and let the market determine the best way to need it. these are challenges ahead of us as we strive to deliver the full job creation and let the market determine the best way to need it. these are challenges ahead of us as we strive to deliver the full job creation potential of natural gas. we have work to do. we're going to have to tell her story and that has never been easy for industry. most of our people would rather focus on developing energy than debating public policy. but for the good of the country, we are going to try.
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for that reason, we just introduced the public information campaign in recognition that natural gas is an important issue for america. we want ever to be able to make informed decisions and we believe as the u.s. centers action campaign season, energy policy will be a point of debate. perhaps not because the energy prices, which are somewhat more moderate comments that hopefully the debate will center in using energy development, particularly natural gas, to drive job creation. we further believe there is cooperation. rather than polarize ideological petition simply talk to to each other as americans instead of as democrats and republicans, instead of liberals or conservatives, we will succeed in anything we do. it includes creation of a comprehensive energy policy.
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the policy that is balanced in economically and environmentally sound. just as important a policy that puts more americans back to work. thank you very much for the invitation to speak to you. i appreciate your patience listening to my comments and hopefully we now have time to take questions or observations from yourself. [applause] [applause] >> thank you, jim. what a number of questions, some still coming in. let's start with one about conocophillips. what percentage of conocophillips's revenue comes from natural gas and went to future projections look like? >> well, i think it's not so much revenue because much of our revenue stream by the refining side of their business. we reproduce or buy crude oil and run it and refineries, it's refined product for customers.
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it's really gorgeous birds or investor capital of a percent of our portfolio is really natural gas? and that represents 40% of our company. we know that the prices are quite low. that's good for the consumer, good for the economy. to the extent energy prices are the is actually a stimulus to help consumers restore and improve the economy. we do think natural gas prices will improve somewhat. we're thinking more in the $5 or $6 range over the long-term. this promotes investment, but it also provides clean energy in an affordable way. >> a number of questions about understanding the pipeline infrastructure and other ways of transporting internationally and so forth. how does that interact with their own use here in the states? >> essentially we have established over many decades the infrastructure of transporting natural gas and
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that is best accomplished safely and efficiently through pipelines. the thought waves, about 10 years ago, maybe five to 10 years ago, we didn't have this abundance course because the type elegy development of unconventional natural gas amira going to import about of gas in the form of allergy. imported energy we are building terminals. the concern was we're running out of natural gas in the concern was that al and she would be priced more closely to oil. the prices at the gas to be going up and down. that this change to magically transform because the technology advances we don't really have to be importing any significant amount. ..
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we provide historically the fuel that runs the automobiles, the tracks and the heavy machines that are produced here in detroit, so obviously oil reserves how can we provide fuels and develop engines and motors to create more and better mileage café standards meeting requirements for rules and regulations and also how do we develop engines and fuel that are best with respect to meeting and improving the cleanliness of the fuels that are used in the transportation sector? now with the development of natural gas obviously we will keep working on the things we have in the past.
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pass. we are now have had the opportunity how can natural gas be used in terms of transportation fleets and we believe that it's best in large metropolitan areas where it can be used for local area, more for deliveries, for trucks or whatever transporting and the large metropolitan area. where you have the ability of refueling and much better and can be done efficiently, so we seized this opportunity for transportation but probably more in the metropolitan areas. but we work very closely with them to produce these transporting vehicles because we provide the fuels that are required and will do this in a way that is affordable. >> one of the students asked about the million potential new job see reference from the natural gas bringing to our economy. where would you see those jobs come and? >> where do i see those jobs coming? >> when and where.
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>> we are always looking for employers to help out in their own companies that rely very much on the service in the contracting industry to help us develop our unconventional natural gas. where the areas? i said in my comments the marcellus areas in the northeast. we see in the middle part of north america, the states of north dakota wyoming, montana. we are finding new areas in haynesville barnett which is located in arkansas and texas but we are also our geologist and our people in our company as well as other companies are looking for the new haynesville in the new barnett. we are trying to find those and in other parts of the united states. we know we have a lot of natural gas resources and now we are trying to find them and we are looking at things we have merit and looked at because of the technology developments our
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industry needs people. is highly technical. we also know that we need to meet the environmental requirements that society and the government demand of us are go so we need the jobs now and they will be growing over the next several decades. is going to take place essentially many if not most of the states in the united states. once we develop the natural gas we have to get into the market so the marketers everywhere, all 50 states. so i look at our industry. i feel i work for a very noble industry because we have the growth and development of our country and our economy if we didn't have the development of energy. we need to continue to develop that energy. is becoming more and more technological, very high-tech in the way we are going to succeed like we have in the past is that we need three things. we do have really good people which we have always had in our industry and need to continue to attract people. we need technology and policy.
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it is important in the development of our indigenous resources. >> eight question here. what is conocophillips latest going green initiative? do you consider yourself a leader in environment with respect to them are mental concerns? >> when we say concern, very concerned because it relates to our ability to operate to continue to operate in a very safe and efficient way but also addressing the government and society's demand from us with respect to the energy that we produce. it has got to be affordable and it must be claimed. with the company of always endorsed the sustainable operations which means our run very efficiently being a good corporate citizen. we want to be safe and continue to reduce our use of water, continue to emphasize the metrics with respect to our releases of emissions. we want to continue to improve
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bad as every year that goes forward. we have also been a participant with u.s. cap climate change initiatives that we can work with the ngos and we can work with other industries and a in a way that comes up with what is technologically feasible in the short-term and medium-term and we believe in the power of cooperation that we talked to everyone because in the way we talk with each other all industry government as well as ngos. we believe we can develop a more informed, make more informed decisions and judgments in how we proceed with energy policy in our country. >> another question from one of the students about recycling and energy conservation programs that are actually looking on for tips on what you recommend to help them get started? >> one of the best ways you can get started is to -- a wealth of information that is available on the web and so you can go and you can find not only what our company is doing in terms of sustainable development, but you get into the web and you can see
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all of the different ways by which you can promote energy efficiency just by how you conduct your own lives, how you drive your cars, how you utilize energy in your homes. there are many ways you can be done without brearley and a significant way altering your lifestyle in a way that promotes use of less energy. because, we help climate change first and foremost, the best ways to use energy more efficiently so if use it more efficiently and use less of it as the most significant way you can take actions. to help in terms of climate change. and, also translate with less use of energy leads to less cost for your energy for your lifestyle. one of the best ways i think is to keep more informed and one of the best places to be informed is get into the web and you will find an incredible wealth of information about how you can participate through conducting our own lives as well as participate with others in
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talking to become more informed and more involved. >> we have a question here about the air arab spring and i know you mentioned earlier that you have been involved in libya. what do you see this having long-term impact on the oil industry and particularly on pricing? >> i don't know for sure with respect to impact on pricing. obviously when production has taken off it as a result of the unfortunate situation that has taken place in libya there is less production. it generally is to higher prices because they're such a fine balance between what the world supply of oil is and what the demand is. currently it is in the neighborhood of about 87, 88 million barrels a day of oil is consumed, and so it is so finally balanced because many people look at is what is the reserve capacity of oil. around the world that is generally centered around the middle east with only two or 3 million barrels so if you lose
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one or 2 million barrels of production and it has quite an impact with respect to price. now what has taken place in north africa and the middle east is going to have a long-term impact i think and certainly on pricing. i think there is not an easy replacement in the short term or the long term for oil to really have superior transportation fuel and so we work need fossil fuels, oil natural gas and coal and it will represent more than 80% of the energy supply for decades to come. we need to use it more efficiently, but i think because of the growth of the worldwide economy the growth in population and the expectation for higher standards of living will lead to increased demand, and that will result in some upward oil prices. the other thing is what is taking place in north africa and the middle east as a result of expectations of society and changes is not just a short-term
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phenomena in my thinking is going to go on for a long period of time as adjustments with respect to governance, adjustment to the economy and expectations of the people. as a result of technology, the knowledge that is available to everyone around the world is certainly made more available and the expectations of people has grown pretty dramatically. this is going to cause quite an adjustment for the area and the world over the next several decades but because there is no easy replacement for oil and the growing population and the expectation for growth and economy and standard of living so many people live in poverty. we see in upward bias on oil supply because of supply and demand. >> a question about problems in the oil industry. this one relates to the gulf of mexico. last year do you see this having continued impact and look forward to future drilling in that region?
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>> it certainly has had an impact with respect to the growth and development in the gulf of mexico. we have a substantial amount of discovered and expected to be discovered oil and gas resource in the gulf of mexico. it is very unfortunate what took place with a macondo incident because we believe two things. one, certainly could have been preventable and second, having that amount of oil or any oil hit the water and stay on the water and go to shore and response capability industry is not acceptable so obviously we must learn from what took place and ensure these incidents are not repeated and second that the response capability industry is dramatic we improve. now, we along with four other companies and quite a few others that have joined us a one to 2 billion-dollar broke and that essentially should such a situation occur in the future, we have in place the assets and
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the equipment that can immediately within a few days essentially take of blowout will condition like like that and essentially with the assets that we have constructed and made available, can actually control the flow in a way that it produces more like a controlled well, not lack of low out well and captures all of the oil that is being produced. thereby having a minimum impact with respect to the incident and the pollution and the oil getting onto the water. so we have got bad and we believe we will have that in place within the next 12 months. that helps address the response capability of the industry. now, we have had a moratorium on drilling. it has been essentially starting to restore drilling in the gulf of mexico but nowhere near the pace of drilling that we have
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had in the past. it is really important for us we believe. we can certainly develop these resources and they are indigenous resources to the united states so we can develop these resources which reduces the importation of oil, so there is less money leaving the united states and there is more investment and more job creation and it leads to more revenues paid to the states, the communities and federal government so for every reason we understand our responsibility that we have to drill and operate in a very safe efficient environmentally sound way but it is time for us to get back to business them back to work in the gulf of mexico. it is having quite a dramatic impact with respect to those communities and states and also as i said in developing our own resources and it has quite an impact on imported into jay and helping with respect to jobs in the deficit. >> someone asked the question quoting this, why do you feel
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this administration rarely talks about natural gas is part of our energy independence solution? >> while the administration and running for election and immediately after election was really pushing very hard new energy sources, getting off fossil fuels and the result of that was essentially the expectations were created very high that we were going to develop the silver bullet and we were going to have all these new green energy jobs and we are not related to oil or natural gas or too cold and the result was very quickly that the technology wasn't developed nor was the investment capability. all these millions of jobs that were essentially discussed and with expectations very high never really materialized. i think it was because such a strong approach and view towards green energy which means anything but fossil fuels, which essentially did not materialize requires quite a dramatic change
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and approach by the administration. i believe the administration and the representatives of congress understand natural gas and that we have a lot of it. it is affordable but now is the time to embrace its come in dorset and push it so that is what we need to do. >> there's a question here about billing rates for natural gas being sent by state or federal government. who controls drilling rights? >> well, it depends on which lands you are on. if you are on federal lands or state lands and all we would save is an industry, a lot of land is not available to our industry. to go unexplored. and we believe the public opinion in the united states is really moved dramatically. let's get people back to work and let's develop our own resources so let's open up more land access availability so we can develop our own resource in their own energy. that helps energy security, health investment and helps jobs
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and helps with respect to revenues for addressing the deficit. >> we need more acreage. to put our industry back to work, more than it is today. >> the question is do you think what a company should continue to receive the subsidies they get? >> well, it is a very popular discussion by many people and when we think about quote subsidies for the oil companies, it is a very unique industry. some of the things we are saying is rules and regulations that say promote employment. if we promote employment we would like to get the same benefits and incentives to promote employment that all other industries do. don't take that away from artistry versus a job as a job and we think we should get the same incentives for that as well. second, in our business when we drill wells one of the hot buttons people talk about intangible drilling. when you build the facility and
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i will say in a different industry you build a manufacturing facility. you are putting concrete steel and other -- say you pay 100 for that a 100 is the cost and it depreciates. when we drill wells the steel for the wells might represent certainly less than half, less than half of the cost of the well because it takes a lot of completion and a lot of contractors and suppliers and in support to drill the wells. that results in costs and that is payments made to other people. all we are saying is whatever the cost of the total well as we would like to be able to depreciate it and that is where you get into intangible drilling costs. some of you view that as a subsidy and we view it as the cost of drilling a well. then another point that is important is don't discriminate to the oil industry when we pay taxes in a foreign land. we would like those taxes to be credible against taxes in the u.s. for operations outside the
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u.s.. don't treat us differently than you would all industry. given all these issues and points that i just talked about, we really favor, i do come our company, we really favor -- let's get back in reform or tax system. let's just make it more simple. let's just make it the same for everyone. let's lower the tax rates and do away with all these different issues of what is deductible and what is not. let's just make it simple. flat tax rate and make it the same for everyone. we really support that. [applause] >> one final question, jim. a a question for monitor students. i'm a student at cass tech high school. what career advice would you give an aspiring biostudent? >> well the most important thing i would say is stay in school, study really really hard. it is important because the better you do in school the more
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you learn the more you develop yourself, the more first of all you are going to feel good about yourself but does the rest of the road really need to? the best advice i can say to you is keep studying, keep working hard in school, stay very focused on your objectives, not just what is ahead of you for the next day or the next week. look out five years, three years, 10 years where you want to go and another thing, stay in school and another thing that is really important, make sure you surround yourself with good friends and people who have similar objectives and the other thing is don't forget your responsibility to your family, to your brothers sisters into your parents. [applause] >> you wow. i am not sure, i'm thinking how do you keep all of -- keep up
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with all that in your head. jim mulva thank you very much. last time mr. mulva was here, this is your third visit and we are so delighted. leaves from my perspective really help me understand the global picture of energy security versus independence and now i feel like you are coming back and kind of here is the next big thing, natural gas, so thank you so much for being here and enlightening us with some things to think about and future directions and energy security obviously which is so very important to our country. steven pulled as always a terrific job. thank you so much in wow i'm telling you we had so many great question so thank you all of you for making that happen. and in our usual on time kind of way, we know that you have been spending a couple of hours with us. we appreciate you doing that because we know you are all very
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very busy. with that, this meeting is adjourned. have a great day. thanks so much. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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